NEW YORK, Dec 11 (Reuters) - The U.S. dollar fell broadly on Thursday, hitting seven-week lows against the euro and yen, as safe-haven demand faded and investors began booking year-end profits following months of steady dollar buying.
Data showing another weekly rise in the number of Americans filing for jobless benefits, this time to a 26-year high, also weighed on the dollar, boosting the case for the Federal Reserve to cut interest rates next week from an already low 1 percent. For full story, see [ID:nN11378229]
With trading conditions thinning ahead of year end, that pushed investors toward the euro, which carries interest rates of 2.5 percent, higher not only than U.S. rates but also those in Britain, Japan and Switzerland, where the central bank cut rates by half a percentage point to 0.5 percent on Thursday.
"The story has shifted this week to a greater focus on yield," said Boris Schlossberg, director of FX research at GFT Forex in New York. With the Swiss National Bank cutting rates on Thursday and the Fed seen cutting rates next week, "the euro is the only belle at the ball."
The euro hit a session peak of $1.3405 <EUR=>, its highest level in seven weeks, before easing to $1.3336. On the day, it rose 2.5 percent, its best daily gain since early November.
The euro also rose 1 percent to 88.87 pence <EURGBP=>, just off a record high of 89.08 pence, and 1.4 percent to 122.24 yen <EURJPY=>.
Implied rate spreads also moved in the euro's favor after European Central Bank Executive Board member Juergen Stark said late Wednesday the bank did not have a lot of room to maneuver on rates after lowering them to 2.5 percent last week.
On Thursday, Axel Weber, head of Germany's Bundesbank, also tried to cool further ECB rate cut expectations, telling a German newspaper "we should be careful when our interest rates enter territory never explored before." [ID:nLB692094]
ECB rates have never been lower than 2 percent.
Sterling rose 1.5 percent to $1.5004 <GBP=> while the dollar fell to 91.18 yen <JPY=>, a seven-week low and not far from its lowest level since 1995. It last traded down 0.9 percent at 91.75 yen.
RISK-AVERSION FADES - FOR NOW
Part of the reason for the dollar's swoon was also tied to a fall in the rates banks charge each other to borrow dollars, reflecting decreased demand for the currency, and a general rise in risk appetite.
The dollar's rally in recent months was mainly the result of investors unloading stocks, commodities and emerging market assets and putting the money into safer U.S. Treasury debt.
It also benefited as investors scrambled to buy the greenback to repay dollar-denominated loans.
In other asset markets, global stocks as measured by MSCI's all-country index have risen 2.1 percent so far in December, paring demand for the dollar as a safe haven.
"All the risk-related reasons to buy the dollar -- demand for dollar money market liquidity, exiting of emerging markets, and U.S. repatriation flows -- have eased," said Alan Ruskin, chief international strategist at RBS Global Banking and Markets in Greewnwich, Connecticut.
Also on Thursday, data showed the U.S. trade deficit widened unexpectedly in October, with imports from China rising to a new high. Some analysts say rising deficits could pose a problem for the dollar in the long run.
Analysts, however, said the dollar's current struggles were temporary and warned that the new year will likely bring a renewed wave of risk-aversion and deleveraging that renews safe-haven flows into the currency.
The euro's rise "is very much a temporary phenomenon," said Schlossberg. "The market is grossly over-optimistic about the eurozone economy's prospects. It will be very difficult for them to keep rates above 2 percent." (Additional reporting by Gertrude Chavez-Dreyfuss; editing by Chris Reese)
Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Tue 17 July 2018 AA 08:30 GB- Employment A 13:15 US- Industrial Production AA 14:00 US-Powell Testimony Wed 18 July 2018 AA 08:30 GB- CPI A 12:30 US- Housing Starts/Permits AA 14:00 US-Powell Testimony Thu 19 July 2018 AA 1:30 AU- Employment AA 08:30 GB- Retail Sales A 14:30 US- EIA Crude A 12:30 US- Weekly Jobless Fri 20 Jun 2018 A 12:30 CA- CPI/Retail Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.